5.  The applicant was born in 1948 and lives in Orsk, Orenburg Region. He is a private entrepreneur.
6.  In July 1998 the applicant purchased a flat on the ground floor of an apartment building with a view to opening there a shop. In August 1998 he started construction works there with a view of tailoring the flat to commercial needs. On several occasions in 1998-1999 the local administration fined the applicant for unauthorised construction. In 1999 the police instituted criminal proceedings against him in this respect, but in 2000 the court acquitted him. The court found that the applicant had carried out works without a relevant permission. However, in the court's opinion, it did not amount to a criminal offence.
7.  The flat bought by the applicant belonged to the category of “living premises”, and could not be used for other purposes than providing housing. In order to function as a shop, the flat had to be officially re-classified as “non-residential premises”. With that view the applicant addressed the Orsk Town Administration (the local executive authority) with a request for re-classification of the flat. On 23 March 2000 that request was rejected.
8.  The applicant challenged the refusal in court. On 8 September 2000 the Orsk Town Leninskiy District Court held in the applicant's favour ordering the local administration to re-classify the applicant's real estate. No appeal followed, and ten days later the judgment became final. On 23 September 2000 enforcement proceedings were instituted.
9.  On 16 October 2000 the Town Administration issued an order allowing commercial use of the applicant's flat. Following that decision on 4 November 2000 the bailiffs' service discontinued the execution proceedings. However, the applicant was still unable to start his business because certain other formalities were not observed and additional permits were needed. In particular, the local authority had refused to provide the applicant with a certified plan of his flat claiming that the order of 16 October 2000 was not sufficiently clear. The applicant appealed to a court. On 25 May 2001 the Leninskiy District Court rejected his claim, stating that the judgment of 8 September 2000 had been duly executed, and that the bailiff's decision to discontinue the execution proceedings had been lawful. This judgment was upheld by the Orenburg Regional Court on 28 June 2001.
10.  On 18 October 2001 a prosecutor lodged a supervisory review appeal against the judgment of 8 September 2000. On 10 December 2001 the Presidium of the Orenburg Regional Court quashed the above judgment. The Presidium held in particular that pursuant to Article 9 of the Housing Code a decision to turn a flat into a commercial facility could only been taken at the regional level, the Town Administration having no authority in that respect. The Presidium also held that the lower court had not examined the opinion of other residents of the apartment building where the applicant's flat was situated. Moreover, the Town Administration had failed to assess possible environmental impact of the functioning of the shop and had not obtained a report from a competent authority. The case was remitted to the first instance court for a fresh examination.
11.  In the meantime, on 24 October 2001 the Orsk Town Council (Орский городской совет депутатов) adopted a new regulation concerning non-residential facilities. Pursuant to that regulation the permission to re-arrange a flat for commercial purposes must be issued by the Town Council instead of the Town Administration. On 28 March 2002 the applicant revoked his initial action against the Town Administration, pending before the Leninskiy District Court and re-submitted his request for re-classification of the property to the Town Council. On 24 April 2002 this body dismissed his request on the ground that a number of the applicant's immediate neighbours objected to a shop being established in the building.
12.  The applicant brought an action against the Town Council. On 11 June 2002 the Leninskiy District Court rejected it on the ground that the neighbours of the applicant strongly opposed to his plan to open the shop. On 16 July 2002 the Orenburg Regional Court upheld that decision.